CIMA Exam CIMAPRO19-P03-1 Topic 6 Question 68 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 68
Topic #: 6

[All CIMAPRO19-P03-1 Questions]

Which of the following will increase the value of a call option?

AAn increase in the strike price.

BAn increase in the time to expiry.

CA decrease in the volatility of the share.

DA decrease in the market value of the share.

Show Suggested Answer

Suggested Answer: B, E, F

by Yuette at May 17, 2024, 01:13 PM

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Curt

10 days ago

Aha, this is a classic options question! I'm pretty sure the answer is B - an increase in the time to expiry. The longer the option has until it expires, the more time it has to increase in value. Easy peasy!

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Eileen

14 days ago

But wouldn't an increase in the time to expiry also increase the value of the call option?

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Kaycee

16 days ago

I agree with Quinn. A higher strike price means the option is more likely to be in-the-money.

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Quinn

17 days ago

I think an increase in the strike price will increase the value of a call option.

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